A company has fixed costs of $300,000 and produces one product with a selling price of $72.00 and a variable cost of $42.00 per unit. The maximum factory capacity is 20,000
units and it anticipates selling 15,000 units. Find the break-even point. Calculate thel
profits if the company produced and sold 20,000 and 15,000 units respectively. Please
show all calculations. (5 points)
Chapter 1

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.